3,767 signal for pump-and-dump attempts were picked up from Telegram groups in a mere six months.

A new academic study by researchers from the University of Tulsa, University of New Mexico, and Tel Aviv University reveals that speculators are manipulating the prices of Bitcoin and other cryptocurrencies by successfully pulling off the age-old pump-and-dump scheme.

The research was done on two messaging platforms – Telegram and Discord – both of which are extremely popular among crypto traders. Multiple groups in both platforms are popular outlets for pump-and-dump schemes, according to the researchers.

Over a period of six-months – from mid-January 2018 to early-July 2018- 4,818 signals for pump-and-dump attempts were identified, out of which, 3,767 instances were on Telegram alone. The paper further detailed that the speculators promoted more than 300 coins on the encrypted messaging groups to lure potential victims.

“The proliferation of cryptocurrencies and changes in technology have made it easier to conduct pump-and-dump schemes,” the authors noted.

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The vulnerability of the cryptocurrency trading scene is primarily because of the lack of any strict watchdog, unlike traditional stock markets. “While the fundamentals of the ruse have not changed in the last century, the recent explosion of nearly 2,000 cryptocurrencies in a largely unregulated environment has greatly expanded the scope for abuse,” they added.

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The paper further mentioned that the technique is very lucrative and profitable. “We then measured the ‘success’ of the schemes, which we define to be the percentage increase in the price following a pump. Ten percent of the pumps on Telegram (Discord) increased the price by more than 18 percent (12 percent) in just five minutes. Recall that the January-July 2018 period was a period in which cryptocurrency prices and trading volume were falling significantly; hence ‘moderate’ percentage increases were an achievement for the pump.”

This is not the first research paper of such kind. Earlier this month, researchers at Imperial College London found that around $7 million worth of cryptocurrency trading volume is the result of pump-and-dump schemes.

Traders at major exchanges like Binance and Coinbase were also victimized by pump-and-dump schemes at many points.

Apart from the anonymous speculator, major crypto influencers like John McAfee were also accused of pulling pump-and-dump schemes using social media.